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The repeated defeats for the government over the Brexit bill in the House of Lords are certainly a problem for the Prime Minister.  Much of the so-called ‘progress’ in negotiations with the EU27 has been achieved by simply kicking the can further and further down the road, whilst phase 1 of the real negotiations – those internal to the Conservative Party – continues, not only with no sign of resolution, but with every indication of hardening attitudes and increasing bitterness.  And until the successful conclusion of that phase 1, something looking less likely on a daily basis, substantive discussions with the EU27 will remain where they have been since day 1, namely making limited progress in private meetings on some of the technical details, but getting absolutely nowhere on the key issues.
But their lordships have caused an even bigger problem for the Labour Party – and more specifically, for its leader.  With the requirement to negotiate continued membership of the single market, via the European Economic Area, now included in the Bill, the House of Commons will have to vote very explicitly to either retain that amendment or to overturn it.  It seems highly probable that, on an entirely free vote, the Commons would vote to retain the amendment, whilst on a whipped vote, sufficient Labour and Tory MPs would be prepared to follow their respective leaders to kill the amendment.  It’s a crunch point for Corbyn, even more so than for May.  Corbyn has an open goal in front of him; a chance to lead his party into a vote which would almost certainly see the downfall of the current Prime Minister and government, and possible even a catastrophic split opening up inside the Tory Party, yet all the indications are that he will opt to throw May a lifeline and support her determination to leave the single market, and her entirely debunked argument that it is somehow possible to have the ‘exact same benefits’ without membership.
There is, of course, something to be said for a political leader who decides that sticking to his core beliefs is more important than seizing party political advantage; principles are still important to some of us at least.  The problem, in this case, is in identifying exactly what those principles are.  Replying to the five Labour MPs from North-East England, who have broken ranks to call for a referendum on the terms of Brexit, a spokesperson for Corbyn was reported as saying that ‘staying in the EEA could undermine a future Labour government’s ability “to intervene” in UK industries with particular issues around state aid and reversing privatisation’.  The problem with this is that the argument that membership of the EU somehow prevents a government from nationalising industries or providing state aid has been thoroughly debunked many times, including by people within Labour itself.  What membership of the EU prevents is not state aid or nationalisation per se, only forms of state aid or nationalisation which give unfair competitive advantage to a business.  And that’s something also banned by WTO rules, and something to which I suspect Labour itself would strongly object if done elsewhere with the aim of undercutting UK industries.
That leaves us with the rather vague objection that membership of the single market whilst being outside the EU would leave the UK as a rule-taker rather than a rule-maker; obliged to follow the rules whilst having so say in their preparation and agreement.  It’s entirely true, of course.  But it’s going to be equally true of any arrangement which comes anywhere near providing the ‘exact same benefits’, and Labour are being utterly dishonest in continuing to argue otherwise.  It is clear by now, even if it wasn’t before, that there are only three options open to the UK: the complete break favoured by the ideological Brexiteers; continued membership of the single market through the EEA whilst being outside the structures of the EU itself; and remaining a full member of the EU. 
Outside the hard-core Brexiteers of the Tory Party (a comparatively small group in reality), parliamentary opinion looks to be divided between the second and third option, largely as a result of differing opinions on whether the referendum result was absolute and final or whether in the light of evidence and shifting opinions there is value in asking the people to confirm or change the decision taken by referendum.  The tragedy is that it is the first option which is looking increasingly likely as the Brexit tail wags the dog, ably aided and abetted by an opposition party whose leader seems determined to support the hard-core Brexiteers for reasons which even he himself seems unable to articulate clearly to anyone.